Analysis on Supply of Pork Industry in 2018

The proportion of pigs in farms with more than 500 pigs slaughtered reached 55% in 2016, compared with 22% in 2007. Since 2015, pig breeding has been focused on environmental protection. For instance, large quantities of small farmers have been shut down because they fail to meet environmental standards. In addition, partial capacity of breeding sows has been eliminated or transferred to farmers above designated size, whose market share has increased rapidly. After the upsurge in closure of domestic farms, marginal effects of shutting down under policies of environmental protection will be relatively weakened in the future.

However, pig breeding will continue to be increasingly large-scale. Compared with Europe and the U.S., there is still much room for the scale of pig breeding to increase in China. The proportion of pig production with 500 or more pigs slaughtered in the U.S. reached 55.9% in 2006, approaching 95% in 2016, when that in the euro-zone accounted for nearly 90%. The proportion in China is projected to exceed 65% by 2020.

The number of slaughtered pigs of breeding enterprises above designated size grows rapidly. According to statistics, the number of sows on hand with 100-500 sows drops quickly compared with the previous year. In Jan. 2017, the number increased by 6.03% YOY, began to decline YOY after July and decreased by 1.65% YOY in December. The growth of sows on hand in small-scale farms is insufficient. Based on data, the number of pigs slaughtered totaled 53.5067 million in 2017, with a YOY increase of 23.34%. According to the slaughter plan in 2018, the number of slaughtered pigs will reach 72.4 million, increasing more rapidly by 35.31% YOY. At present, prices of pigs are in the downward cycle. The release of production capacity of large-scale farms in 2018 will influence pig prices.

In 2018, net imports of pork remain stable. Before 2015, pork imports took up a small proportion of the total supply, with little impact on pork prices. In 2016, the import volume began to rise significantly. The data shows that China’s net import of pork amounted to 1.99 million tons in 2016, accounting for 3.61% of the total pork supply, up by 149% YOY. In view of high pork prices in this year, importing large quantities of pork would help hold down prices and guarantee pork supply. In 2017, pork imports started to decline, with the net imports reaching 1.44 million tons, decreasing by 27.89% YOY. It is estimated that the net import volume in 2018 will reach about 1.365 million tons, slightly lower than that in 2017.

Research Report on Pig Raising Industry and Pork Market in China, 2018-2022